The Impact of the ACA Medicaid Expansion on Public Program Participation and Labor Market Outcomes of Low-Wage Workers

Findings: The Impact of the ACA Medicaid Expansion on Public Program Participation and Labor Market Outcomes of Low-Wage Workers; Lara Shore-Sheppard, Lucie Schmidt, and Tara Watson, Williams College

Co-funded with the Robert Wood Johnson Foundation

The expansion of Medicaid under the Affordable Care Act (ACA) is likely to have a wide range of effects on public program participation and on labor market outcomes.  For example, increased access to Medicaid that does not depend on participation in other safety net programs may reduce the marginal benefits of participation in those other programs, and therefore lead to decreases in caseloads.  Alternatively, those newly-eligible for Medicaid may become aware of the availability of public programs and/or reduce the marginal costs of enrolling in them. The Medicaid expansion could also affect safety net use via its labor market effects. By weakening the link between employment and health insurance, the ACA may reduce job-lock, allowing some individuals to leave the labor force, to reduce their hours of work, or to move to a job that is a better match and perhaps lead to higher wages.  In addition, because Medicaid expansions may affect access to care and thereby improve health, they could improve worker productivity or labor force participation indirectly.

Understanding how Medicaid expansions affect participation in safety net programs and employment outcomes has implications for assessing the true costs and benefits of the ACA and its impact on individual well-being.  Economists Lara Shore-Sheppard, Lucie Schmidt and Tara Watson will use several data sources and empirical approaches to address these issues.  Because states that expanded Medicaid were quite different pre-reform than states that did not opt for expansion, the investigators will focus on differences in adjacent county pairs across state lines to explore the degree to which the ACA expanded these counties' insured populations.